On Sun, Jun 12, 2011 at 11:28 PM, Jeffrey Walton <noloa...@gmail.com> wrote: > I recall Obama boasting: "My Administration is the only thing saving > you from the pitchforks of the American people [sic]" at a banker's > lunch after he took office. On the campaign trail, he received over 1M > USD from Goldman Sachs alone. In this case, Obama took the bride money > (err, PAC contributions) and provided political cover. > > If you game the Ticket Master system, you will be faced with a PATRIOT > Act like rsponse from the US governemnt . If you make a PAC > contribution, you can crash the economy with impunity. Obama upset the > balance of powers (the best I can tell, the SEC investigations have > been laughable - civil fines, but no criminal prosecurtions), and I > would love to see him spend the rest of his natural life in jail for > conspiring with the economic terrorist who crashed the economy.
Perhaps it's because I earn some of my living from a financial institution (but I doubt it, since I held this opinion back when I didn't), but I don't think it's fair to blame private financial institutions for the ill-effects of an ill-advised government plan to subsidize housing ownership by individuals. Without Frannie, CRA, or anything of the sort I don't think we'd have seen the degree of financialization of housing that we saw, meaning that we wouldn't have seen the home mortgage credit growth that drove the housing bubble, thus neither the bubble nor the crash. (Well, bubbles can happen without the help of the government, so let's say that the likelihood of such an immense bubble would have been pretty low without Frannie and CRA). Now, financial institutions clearly played a role, but mostly it was a fee-taking role (since they mostly passed mortgages through to Frannie), and it was a role they had to play (see CRA). Some played a role in the securitization of lousy mortgages, but I'm not sure that they understood the systemic risk -- the securities' buyers certainly didn't, even though most were also financial institutions with sophisticated people in charge, so it's not too much of a stretch to think that this was all really just a necessary consequence of CRA and Frannie. That's my theory anyways. Nico -- _______________________________________________ cryptography mailing list email@example.com http://lists.randombit.net/mailman/listinfo/cryptography